On Thursday, we announced that Florida has entered a historic, national $25 billion settlement with the nation's five largest mortgage servicers over foreclosure abuses and unacceptable nationwide mortgage servicing practices. This settlement will provide substantial relief to struggling Florida homeowners, and it ensures that our state gets its fair share of the relief being provided nationally. The proposed agreement provides an estimated $8.4 billion in relief to Florida homeowners and addresses future mortgage loan servicing practices. Additionally, this agreement holds banks accountable and puts in place new protections for homeowners in the form of strict mortgage servicing standards.
Florida's share of the total monetary benefits under the settlement is approximately $8.4 billion.
• Florida borrowers will receive an estimated $7.6 billion in benefits from loan modifications, including principal reduction, and other direct relief.
• Approximately $170 million will be available for cash payments to Florida borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 and suffered servicing abuse.
• The value of refinanced loans to Florida’s underwater borrowers would be an estimated $309 million.
• The state will receive a direct payment of $350 million.
In addition to the terms of the national settlement agreement, we separately negotiated an agreement with the nation's three largest mortgage servicers to ensure that a guaranteed portion of the overall settlement funds goes to Florida borrowers.
The unprecedented joint state-federal settlement is the result of a civil law enforcement investigation and initiative that includes state attorneys general and state banking regulators across the country, and nearly a dozen federal agencies. The settlement holds banks accountable for past mortgage servicing and foreclosure fraud and abuses and provides relief to homeowners. The settlement generally releases civil claims related to robo-signing, other foreclosure-related abuses, and loan origination misconduct, but it provides no release of criminal claims or of claims related to mortgage securitization.
I am pleased that we were able to obtain much-needed relief to Floridians and help restore stability to Florida’s housing market.